Digital Trends in Financial Institutions: Challenges and Strategic Responses for Management

Abstract

This paper analyzes the digital transformation of the financial sector, including banking, insurance, investment funds, and microcredit organizations (MCOs). It identifies key digital trends such as FinTech, Artificial Intelligence (AI), and Blockchain, and examines their effects on business performance and regulatory requirements. The study highlights management challenges, especially the need for skilled staff and ongoing investment in technology. Its main objective is to present strategic solutions for overcoming digitalization challenges, with a focus on Bosnia and Herzegovina, and to outline future directions for performance improvement. The research finds that partnering with FinTech companies is the most effective strategy and offers a new analytical framework for addressing digital challenges in transition economies.